Global M&A picks up in Q1

Mergers and Acquisitions (M&A) bounced back in the first quarter after a downbeat 2023, thanks to the return of mega deals, cheering investment bankers and lawyers waiting for a pick-up.

Total M&A volumes globally climbed 30% to about $755.1 billion, according to the most recent data from Dealogic. The number of transactions worth more than $10 billion jumped to 14, compared with five during the same period last year.

Investment bankers said boardroom confidence for dealmaking has improved on the back of strong earnings, potential interest rate cuts this year, and an ebullient market. “When you see larger deals happening, it’s a much more direct sign of the returning health of the market, because boards and CEOs, due to the nature of large deals, are going to be more conservative when they approach them,” said Blair Effron, co-founder of investment bank Centerview Partners. “We do think that the activity that we see today is heading in the right direction.”

US M&A volumes surged 59% to $431.8 billion. European deals jumped 64%, while Asia Pacific volumes slumped 40%. Dealmakers said a potential market recovery, following the successful debuts of Astera Labs and Reddit, could provide a boost to the pipeline.

Leveraged buyout volumes, which slumped last year due to a spike in financing costs, declined 7% to $91 billion.

“We’re still waiting for the private equity work to really pick up - that’s still the missing ingredient,” said Krishna Veeraraghavan, global co-head of the M&A group at law firm Paul, Weiss, Rifkind, Wharton & Garrison. “You still are seeing a mismatch between what sellers expect their assets to transact for and what buyers are willing to pay based on where rates are right now.”

Published in The Express Tribune, March 29^th, 2024.

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